Transtasman bar to Qantas alliance

Qantas has been barred from preparing for a transtasman
alliance with Emirates due to concerns the deal would lead to
inflated airfares between Australia and New Zealand.

The Australian competition regulator yesterday granted
interim approval for Qantas and Emirates to begin preparing
for an alliance which would see the airlines cooperate on
long-haul passenger and freight operations across their
networks.

The interim decision allows for preparatory work only, with
the Australian Competition and Consumer Commission (ACCC)
expected to make a final decision on an alliance in March.

In a statement, the ACCC said the public benefits of the
alliance, due to start in April if approved, were likely to
outweigh concerns with the impact on competition.

But the regulator also blocked the airlines from preparing
for a partnership on flights between Australia and New
Zealand.

"The ACCC is concerned that the alliance may have an
increased ability and incentive to reduce or limit growth in
its capacity in order to raise airfares.

"Therefore, the ACCC is granting interim authorisation on the
condition that the applicants do not engage in the conduct
for which authorisation is sought in relation to services
between Australia and New Zealand."

Qantas said the decision reflected the fact that New Zealand
law did not provide for interim authorisation.

Chief executive Alan Joyce said the alliance would enable the
two airlines to coordinate more closely and allow customers
to book travel on most parts of the combined Qantas and
Emirates network.

"This decision means we can determine pricing, capacity and
scheduling with Emirates, in addition to the more logistical
aspects of the partnership that we have been working through
already," he said.

"For consumers, interim authorisation means we can provide
details on fares and allow people to book one-stop
destinations on most parts of the combined Emirates and
Qantas network."

Fares on the combined network were expected to be announced
in coming weeks once pricing discussions had taken place.